How Republicans can replace Obamacare — now – Pacific Research Institute

How Republicans can replace Obamacare — now

Last month’s election proved that congressional Democrats don’t have much of a future in the prediction business.

Rep. Nancy Pelosi, D-Calif., claimed that Obamacare would be a “winning” issue. Rep. Debbie Wasserman Schultz, the Democratic National Committee chairwoman, said, “This election certainly won’t turn on the Affordable Care Act.”

The polling data suggested otherwise. A majority of Americans was steadfast in their opposition to Obamacare prior to the election. A new Republican congressional majority was the result.

That new majority must heed the will of the public by repealing Obamacare and after the president leaves office, replacing it with reforms that will reduce health costs and expand access.

Some parts of the law may be repealed with bipartisan support — starting with the medical device tax. The 2.3 percent levy on everything from pacemakers to MRI machines applies to gross sales rather than profits. So even money-losing companies must pay the tax.

Device companies will respond by cutting jobs — as many as 43,000, according to one industry projection.

Democrats and Republicans alike favor scrapping the tax. Last year, 79 senators, including 33 Democrats, signed on to repeal it. The House voted earlier this fall to roll back the tax.

It’s time for Congress to send a bill repealing it to the president.

Next, congressional Republicans should target Obamacare’s employer mandate.
President Obama may be sympathetic. He’s already twice delayed implementation of the mandate, which requires businesses with more than 50 full-time employees working 30 hours or more a week to offer health insurance. His administration has admitted the mandate is “not critical” to Obamacare.

It is, however, harmful to the economy. Large businesses may hold off hiring full-time employees to dodge the requirement that they give them health insurance. Smaller companies may stop expanding. The National Federation of Independent Business says a business that crosses the 50-employee threshold immediately realizes $40,000 a year in penalties — or the potentially larger cost of providing health insurance to all of them.

After relieving businesses of the employer mandate, Congress should give ordinary folks a break by repealing the individual mandate. It requires them to buy health insurance or pay a fine.

The mandate is unpopular because insurance has grown so expensive. Between 2013, pre-Obamacare, and 2014, when the law went into effect, insurance premiums increased 78 percent among men age 23 and 44 percent among women age 23.

Democrats aren’t likely to support a GOP effort to scrap the individual mandate. So Republicans should use the tool the president’s party used to first pass Obamacare — budget reconciliation.

This procedural move allows the Senate to approve bills related to taxation and spending with a simple majority, rather than the 60 votes typically required to overcome a filibuster.

The individual mandate is only alive today because the U.S. Supreme Court declared it a constitutional use of Congress’s taxation power. Republicans should use that logic to repeal the mandate.

The new GOP majority shouldn’t limit its ambitions to repealing Obamacare. It must also have a plan in place to replace the law should a Republican take the White House in 2016.

First and foremost, Congress must reform Medicare and Medicaid. Spending in the two programs already outstrips private health insurance spending. Medicare costs are projected to exceed $1 trillion by 2022; Medicaid costs may surpass $850 million by then.

Congress can rein in those costs by issuing Medicare beneficiaries means-tested vouchers to purchase coverage from private insurers who compete for their business. Competition will reduce costs and improve quality.

Lawmakers should replace with block grants the Medicaid status quo, whereby the federal government encourages the program’s expansion by matching what states spends. Such a move would reward states that spend their Medicaid money wisely.

Second, Congress should allow people to purchase health insurance with pre-tax dollars, just as businesses can. Those with lower incomes could receive a refundable tax credit to help offset the cost of insurance. Such a change would empower consumers to choose a health plan that’s portable from job to job — and meets their own needs and budget.

Americans are through with Obamacare. A new poll from Gallup shows that only 37 percent support the law — a record low. It’s time for the new GOP majority to act on the voters’ orders — and repeal and replace the president’s healthcare law.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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